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What is the difference between video and grabación? In other words, what types of "videos" does each describe? Which of the two would best describe a video recorded using a home video recorder or digital camera?

3 Answers
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A 'grabación' is best used for non-professional video recording. 'Vídeos' is used for any kind of visual media, usually for short formats.

If you refer to a short format like a youtube video or a video taken with the phone you will say 'vídeo'. But we usually say 'vídeo' if the video is in VHS or BETA format. Those video magnetic cases are named 'vídeos'.

Vídeo

Phisical Format The device that holds magnetic tape, used to record images and sound (usually refers to VHS).

VHS Player The machine to reproduce vídeos is also called vídeo.

Recording The recording of images in some sort of physical media. Nowadays this is the most used, since VHS was replaced by other forms of storage. Any kind of video is called vídeo: vídeos de Youtube, un vídeo en al tele, etc.

Grabación

It can be translated to recording, and it means:

Act of recording The actual act of capture images and audio in some sort of physical media.

Recipient of recording The physical device in which a video is held.

So they have similar meanings, but for vídeo the most common is the concept of a video, and for grabación it's the act of recording a vídeo.

From RAE.es Vídeo and Grabacíon (sorry for the weird links, it's hard to link to words with accents).